* FTSEurofirst 300 up 0.2 percent
* BT rallies 4.2 pct after results beat
* Spanish index down 1.5 pct as short-selling ban is lifted
By Francesco Canepa
LONDON, Feb 1 European shares edged higher on
Friday, led by British stocks after telecoms operator BT
reported better-than-expected results while data showing growth
in Chinese factories boosted mining stocks.
Strong demand for broadband and tight cost control helped
BT offset the combined pressures of regulation and recession to
post a better-than-expected 7 percent rise in third-quarter
pre-tax profit, sending its shares 4.2 percent higher.
Also rising were heavyweight basic resources stocks, up 0.7
percent. The two versions of China's purchasing managers' index
PMI showed factory output in the world's largest consumer of
metals rose in January, although one showed the revival was
still only moderate.
The broader FTSEurofirst 300 index was 0.2 percent
higher at 1,166.40 points, struggling for direction as key
economic releases due later in the day, including euro zone
manufacturing figures just before 0900 GMT and a U.S. jobs
report at 1330 GMT, kept investors on tenterhooks.
The FTSEurofirst is up by around 3 percent since the start
of 2013, extending a rally launched by the European Central
Bank's pledge last July to protect the euro from the sovereign
Traders said some volatility was on the cards ahead of the
U.S. non-farm payrolls report, which is expected to offer more
hope that the world's largest economy is on track to recover
robustly, even after a disappointing quarterly GDP reading.
"The initial data from the euro zone and the UK may give us
some direction but then again I think towards midday we're going
to see some volatility, low volumes and people staying on the
sidelines," Ishaq Siddiqi, a strategist at ETX Capital, said.
"January was a spectacular month and indices are exhausted.
With a month like February, where there are some many risks
involved, like the Italian elections and the U.S. debt debate,
it would be normal top see some profit taking."
Wouter Sturkenboom, investment strategist at Russell
Investments, had tactically reduced his equity weighting to
slightly "underweight" while he was "overweight" cash, believing
the share price rally had taken valuations to levels that are
unattractive in the context of low economic growth.
Russel, which has $170 billion under management, expected
the payrolls report to show 168,000 jobs were added in January.
A Reuters poll of analysts shows a consensus of 160,000.
"Payrolls should continue in their mediocre pace of
expansion at around 150,000-160,000 a month," Sturkenboom said.
"If we see 200,000 plus, which we don't expect, that would
be very bullish. It would challenge my view that the U.S. is
slowing down at the moment."
He said a reading of less than 100,000 would raise an alarm
bell but he cautioned that a single, disappointing reading would
not be enough to turn him more bearish on shares.
Spain's Ibex underperformed on Friday, shedding 1.5
percent after the country's market regulator lifted its ban on
selling borrowed stocks and bonds, is a sign some investors were
betting on declines in Spanish stocks after a 23 percent rally
in the past month.
Lender BBVA weighed, down 1.3 percent, after
saying its net profit fell 44 percent in 2012 due to big
provisions against soured property assets in its home market, in
a reminder of the fierce economic crisis facing Spain.